Austria Initiates Competition Probe After Mobile Prices Rise

Austrian competition regulator BWB has announced plans to investigate the developments in mobile prices since the market was reduced to three operators by 3 Austria’s acquisition of Orange Austria at the beginning of 2013. The BWB said it will conduct a thorough review of the “highly concentrated” market in order to ensure consumers are not disadvantaged by any anti-competitive behavior, that no commercial practices are distorting or restricting the market and that fair and transparent competition is ensured. The BWB, which said it is working with other governmental bodies on the investigation, has begun by requesting further information from the mobile operators. T-Mobile Austria stated that it had received such a request and was cooperating with it.

When 3 Austria (owned by Hutchison Whampoa) bought Orange’s Austrian unit for €1.3 billion (US $1.7 billion), the number of MNOs in the country went from four to three. To compensate for that, the government required 3 Austria to offer up to 16 prospective MVNOs access to its network. However, there were no takers. Now, the operator says it is in talks to launch one or two MVNOS before the end of 2014. Its remaining MNO competitors, T-Mobile Austria and Telekom Austria, host more than a dozen MVNOs between them.

T-Mobile, which received a request for information, said in a statement that its pricing was based entirely on its own commercial considerations and costs, which it said have been increased by the high prices in the country’s recent spectrum auction, as well as by higher energy prices and the need to invest in its network to meet growing demand for data. It also said that competition is poised to increase rather than decrease due to the expected entry of new MVNOs in the coming months.

 

“The situation in the Austrian market is murky at present and underscores how difficult it can be to assess the consequences of telecom mergers. Nevertheless, it appears that if the consolidation of 3 and Orange has not reduced competition, it certainly has done little or nothing so far to stimulate it.”

John Dorfman,

Editor-in-Chief,

The Tarifica Alert

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

América Móvil Increases Its Stake in Telekom Austria to Over 50 Percent

América Móvil has announced that it has raised its stake in Telekom Austria to 50.8 percent. Its tender offer of 23.5 percent of the Austrian operator’s shares closed on 10 July, and its payment of €7.15 (US $9.70) per share is due by 24 July. Shareholders who did not tender their shares will have three more months in which to do so. The Austrian government will retain a 25 percent stake in Telekom Austria, under a joint shareholding pact it agreed upon with América Móvil in May. América Móvil, controlled by billionaire Carlos Slim, was declared dominant by Mexican regulators last year. While it is appealing the dominance finding, it seems that América Móvil has accepted that an appeal is very unlikely to succeed. Last week, the Mexican government approved broad regulations aimed at opening up the telecommunications and broadcasting industries. Shortly thereafter, América Móvil announced plans to divest itself of some of its operations in Mexico, which were not specified, in order to bring the company’s share of the Mexican telecommunications market below 50 percent. That could remove its dominant status and allow it to enter the TV sector.   Whether or not it ends up entering that sector, Mexico has clearly become a much less comfortable environment for América Móvil than previously. With opportunities contracting at home, and the size of its business set to contract there as well—at least for now—América Móvil is looking to expand abroad. By increasing its stake past the 50 percent mark, América Móvil will now control Telekom Austria’s management decisions and thus is set to become a player not only in Austria but in other Central and Eastern European countries where Telekom Austria has a presence.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx